What is an HSA?

A Health Savings Account (HSA) is a type of personal savings account you can offer to employees covered by qualified high-deductible health plans (HDHPs) to help them save money on many out-of-pocket medical expenses like doctor visits, vision and dental care, and prescriptions.

Benefits for your employees

Triple Tax Advantage1

An HSA offers unique tax advantages that help employees keep more of their hard-earned money by providing the potential for:

Pretax contributions: Contributions to an HSA can be made with pretax dollars which means every dollar employees contribute to their HSA is a dollar saved (employers can offer a payroll deduction2 option to help employees make contributions on a pretax basis)

Tax-free gains: Any gains on the money in an HSA are tax-free so employees keep 100% of any money their HSA savings or investments earn, boosting the amount of money they have to cover their out-of-pocket medical costs.

1 About Triple Tax Advantages: Participants can receive tax-free distributions from their HSA to pay or be reimbursed for qualified medical expenses they incur after they establish the HSA. If they receive distributions for other reasons, the amount withdrawn will be subject to income tax and may be subject to an additional 20% tax. Any interest or earnings on the assets in the account are tax free. Participants may be able to claim a tax deduction for contributions made to the HSA. Bank of America recommends that applicants and employers contact qualified tax or legal counsel before establishing a HSA.

2 In order to offer payroll deduction, an employer’s cafeteria plan must comply with Internal Revenue Code Section 125.

3 The Internal Revenue Service publishes a list of qualified expenses in Publication 502, Medical and Dental Expenses available at www.irs.gov.

4 This HSA debit card program is issued by Bank of America, N.A. Visa is a registered trademark of Visa International Service Association, and is used by the issuer pursuant to license from Visa U.S.A. Inc.

5 Data connection required. Wireless carrier fees may apply. Mobile app not available on all devices.

Resources for individuals

Resources for employers

Bank of America makes available The HSA for Life® Health Savings Account as a custodian only. The HSA for Life is intended to qualify as a Health Savings Account as set forth in Internal Revenue Code Section 223. However, the account beneficiary that establishes the HSA is solely responsible for ensuring that he/she satisfies the Health Savings Account eligibility requirements set forth in Section 223. If an individual/employee establishes a Health Savings Account and he/she is not otherwise eligible, he/she will be subject to adverse tax consequences. In addition, an employer who makes contributions to an HSA of an ineligible individual may also be subject to adverse tax consequences. We recommend that HSA applicants and/or employers contact qualified tax or legal counsel before establishing a Health Savings Account.

Bank of America does not sponsor or maintain the Flexible Spending Accounts or Health Reimbursement Arrangements that you establish. Those programs are sponsored and maintained solely by the employer. Bank of America is nothing more than a claims administrator who performs ministerial administrative tasks with respect to such arrangements pursuant to agreement with the employer. The employer is solely responsible for ensuring that such arrangements comply with all applicable laws.

The planning tools and information calculators are illustrative only, and accuracy is not guaranteed. They are intended to provide a comparative tool for various consumer health care options and potential costs and savings of those options. Bank of America and its affiliates are not tax or legal advisors. The calculators are not intended to offer any tax, legal or financial advice and do not assure the availability of or your eligibility for any specific product offered by Bank of America or its affiliates. Please consult with qualified professionals to discuss your situation. This site may contain links to third-party content, which may be articles, videos, or calculators, regarding health plans only as a convenience. Some articles, videos and calculators may have been written and produced by third parties not affiliated with Bank of America or any of its affiliates.

Bank of America does not provide tax, legal, investment or benefits consulting advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties. This material should be regarded as general information on health care considerations and is not intended to provide specific health care advice.

All trademarks and service marks belong to Bank of America Corporation unless otherwise noted.

Mutual fund offerings are provided by Devenir, LLC, which is a registered broker-dealer and member FINRA/SIPC. Devenir, LLC provides investment services through its affiliate Devenir Investment Advisers, LLC, which is a registered investment adviser. Devenir, LLC is not an affiliate of Bank of America Corporation.